Ashok threatens to shoot Brijesh if he does not let out the house to him. Brijesh agrees to do so. This agreement has been brought about by coercion.
Ajay and Bittu are negotiating on a Contract, but Ajay are unwilling. A third party threatens to assault Ajay if he does not enter into contract with Bittu, who is unaware of these threatening. Ajay, thereupon out of fear, enters into a contract with Bittu. Does the contract become binding on Ajay?
Sec.16(1): “A contract is said to be induced by ‘undue influence’ where the relations subsisting between the parties are such that one of the parties is in a position to dominate the will of the other and uses that position to obtain an unfair advantage over the other.”
When is a person deemed to be in a position to dominate will of another?
Real or apparent authority, or
In a fiduciary relation, or
Mental capacity temporarily or permanently affected by reason of age, illness, or mental/bodily distress.
Relationships of father & son, guardian & ward, husband & wife, doctor & patient, trustee & beneficiary, solicitor & client, pardanishin women, etc would fall within the ambit of undue influence.
Sec.17: Fraud means and includes any of the following acts committed by a party to a contract; or with his connivance; or by his agent, with intent to deceive another party thereto or his agent, or to induce him to enter into the contract –
(1) the suggestion, as to a fact, of that which is not true by one who does not believe it to be true;
Consent given under misrepresentation of facts is no consent at all.
A statement made which in fact is not true, under the belief that it is true, is misrepresentation.
X says to Y that Z’s horse is of a very good breed & can run 40kms at a stretch. X believes it to be true and Y buys the horse from Z. It turns out that the horse can run only 4kms. This is misrepresentation.